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Sci-Tech Information: Russia To Be The Next Battlefield For Makers of Tele-networks



By Huang Jingjing

Russian mobile carriers are gearing up for about $13 billion in spending to boost data speeds, creating the next major battleground for network suppliers.


Russian mobile carriers are gearing up for about $13 billion in spending to boost data speeds, creating the next major battleground for network suppliers.

Sweden’s Ericsson AB (ERICB), the No. 1 maker of wireless networks, and Finland’s Nokia Siemens Networks have won some of the early contracts. They will face challenges from competitors such as China’s Huawei Technologies Co. for the rest of the deals.

“The geographic scope, population size, economic demand and growth all indicate the size of the contracts coming out of Russia could be outstanding, and everyone will want a piece of it,” said Daryl Schoolar, a wireless infrastructure analyst at researcher Ovum.

While smaller in value than the U.S. and some European countries, wireless markets in faster-growing economies such as Russia and India are crucial for network-gear providers because of their future potential. Economic expansion in Russia exceeds most of rest of Europe -- at 3.4 percent last year and 4.3 percent in 2011 -- and winners of contracts for this network-upgrade cycle are likely to be considered for projects in years ahead.

Equipment makers could get as much as half of that, according to LTE Union, a Russian industry group. The rest will go toward expenses such as construction work.

Three Ericsson engineers this month were working on the roof of an office building near the Kremlin, adding 4G antennas and a transmitter to a VimpelCom base station. That upgrade should allow a tripling in data speeds for users with smartphones or tablets supporting 4G.

“Russia is a big, modern country and a promising market to work in,” said Kristina Tikhonova, head of Nokia Siemens’s eastern operations. “Our ambition is to become the No. 1 preferred vendor for Russian operators.”

So far, Russian operators have selected the same equipment suppliers they used for older third-generation networks in certain regions to upgrade their networks to 4G, Libin said.

That may be good news for Huawei, which supplied 3G equipment to billionaire Alisher Usmanov’s MegaFon, Libin said. Huawei is taking part in all major 4G tenders in Russia, Tatyana Fomicheva, a spokeswoman for the company in Moscow, said by e-mail. MegaFon may announce 4G vendors as early as this month.

France’s Alcatel-Lucent SA has also been looking to build its share of the Russian market and last year set up a research and development laboratory in Moscow to work with local state-owned electronics company Rostechnologii on ultra-high-speed Internet network technology. The facility is focusing on Alcatel’s technology of miniature mobile-network antennas. The company has sold such antennas, called small cells, to MegaFon.

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